Cargill Inc., adapting to rising consumer interest in how food is produced, on Thursday announced it was taking a stake in a European company that specializes in natural additives to animal food.
The company’s partnership with Austria-based Delacon will bolster Cargill’s animal-foods business by adding the equivalent of an organics section.
Cargill said it will take a minority stake in Delacon. Precise terms were not disclosed, but Chuck Warta, president of Cargill Premix and Nutrition, said it is the largest investment yet by Cargill for naturally fed animals.
“The fundamental trend is the average consumer does care about how their food is produced, and care more and more about the specifics of how the animal was produced, what it ate, was it healthy, was it treated in a respectful way,” Warta said. “Consumers of animal protein around the world are looking for things they deem as natural. People want to feel good about their food.”
Delacon specializes in organic animal feed and will gain access the Wayzata-based agribusiness giant’s global reach. But Delacon will also retain its distribution network, the companies said.
Delacon, which has about 130 employees, specializes in phytogenic feed additives, a category that uses natural ingredients, herbs, spices, and other plant extracts.
Such feeds are a natural alternative for companies and individual livestock farmers who are trying to develop antibiotic-free feeding programs and shift away from chemically-modified feeds.
“Our agreement with Cargill represents an opportunity to accelerate growth and invest in Delacon’s future and the future of phytogenic feed additives, as our customers are looking for solutions delivered in a natural, efficient and sustainable way,” Markus Dedl, chief executive of Delacon, said in a statement.
He added that phytogenics are turning from a niche market into a mainstream need for farmers. “We are entering a new era of phytogenic feed additives, and the next five years are decisive for the developments in this growing market,” Dedl said.